Role-playing in the Persian Gulf: Iran continues to insist that it is building an innocent nuclear power industry but, as it discovered again this week, a successful serial assassin does not believe it. Mostafa Ahmadi Roshan is the fifth Iranian nuclear scientist to be slain in four years, writes the New York Times' Scott Shane, who reports on a general spate of mayhem rained on Tehran's purported foray into nuclear energy. At New York magazine, Dan Amira regards the predicament of Iranian nuclear scientists as an opportunity for amusement. Certainly there is something darkly satirical about Iran's self-parody. If you really are only developing nuclear power, open the whole thing up like a public swimming pool so any mystery vanishes. If you, conversely, are carrying out as everyone assumes -- that is, developing nuclear arms -- why stir the pot with provocative outbursts all-but certain to lead to attempts to confound your program? Why not wait until your work is complete before throwing sand into others' eyes?
Whatever the case, the U.S., Europe and an important majority of their allies have agreed collectively to stop buying Iran's 2.3 million barrels a day of oil exports. Of Iran's major customers, only China and perhaps Turkey so far refuse to go along. The client for some 540,000 barrels of Iranian crude a day, China will probably continue this trade and store the crude in its strategic petroleum reserve, reports the Financial Times' Javier Blas. As for the rest of Iran's output, those familiar with oil smuggling have assumed that Iran will simply turn to deep discounts in order to unload its crude on the black market, but Blas writes that Tehran may have a difficult time doing so because of a global embrace of the sanctions.
Iran has threatened to block the Strait of Hormuz, but probably won't do so since it would be one of the primary victims of such a blockade, assert Frank Verrastro, David Pumphrey and Guy Caruso at the Center for Strategic and International Studies in Washington. Yet one cannot feel entirely certain about that, they add. "Desperate nations driven to the brink sometimes do desperate and unpredictable things, and even if short lived, disruption to shipping in the Gulf would undoubtedly wreak havoc in oil markets," the trio says.
Go to the Jump for more of the Wrap
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Oil, and the geopolitics of China and Iran: President Barack Obama's new military policy -- the U.S. focus will shift to two geographic areas, China and Iran -- steps up the geopolitics of oil. In the case of China, what keeps American policymakers up at night? It is the prospect of a challenge to the U.S. control of movement on the world's seas. As of now, Beijing's navy isn't impressive, but it has proven a nuisance in one place -- the South China Sea. It is there that Washington -- along with Chinese neighbors such as Vietnam and the Philippines -- has thrown down a red line. What has the South China Sea friction been about? As suggested, for the U.S. it is the geopolitical influence that accompanies dominance of the world's seaways. But, locally speaking, it is mostly a belief that the South China Sea lies above massive volumes of oil and gas. So the U.S. will maintain a naval presence in the area.
No one at the moment is going to go to war over the South China Sea, but in the case of Iran, we enter a different universe. Europe appears likely Jan. 30 to approve a near-cutoff of oil purchases from Iran. Obama signed a U.S. version of the sanctions this week. Iran's response has been military -- it calls the sanctions an act of war, and has threatened to close the Strait of Hormuz, the channel for 17 percent of the world's daily oil supply. As a demonstration that it can do so, Iran has announced more naval maneuvers, to be held next month, reports Reuters' Robin Pomeroy. So are we at the cusp of World War III, as some have suggested, especially if Iran unleashes Hezbollah on Israel? In Tehran, the Washington Post's Thomas Erdbrink and Joby Warrick describe a populace stocking up in the event of fighting. At Foreign Affairs, Suzanne Maloney suggests that Iran correctly defines the sanctions as a war footing: By attacking Iran's Central Bank, and thus its ability to pay its bills, and be paid, the West has "backed itself into a policy of regime change." Even if one regards negotiations as ineffectual, Maloney writes, a shift to promoting the ouster of Iran's rulers is worse, placing a reliance on dynamics that "Washington has little ability to influence." Commentator Fareed Zakaria disagrees. He says that Iran is no threat, but instead is becoming "weak and getting weaker."
Read on for more on Iran, and the rest of the Wrap.
Last summer, a galactic cluster of energy experts informed us that the U.S. economy was failing to reignite in part because the Obama Administration was barring sufficient oil drilling in the Gulf of Mexico. Just three months later, the same experts say the U.S. is awash in domestic oil, and perhaps on the verge of independence from foreign oil. Serious journalists in Europe and the U.S. are sold on this ostensible shift, with all the geopolitical ramifications.
But what has changed? Not the fundamental numbers -- drillers were not oil-poor in August, only to be swimming in hundreds of thousands of barrels more of crude today. Instead, one suspects that politics are partly responsible for both the old and the new conventional wisdoms. As Rachel Leven writes at The Hill, 33 lobbying firms are swarming Washington alone to persuade decision- and opinion-makers on the critical importance -- or trifling unimportance -- of energy independence, in this case as represented by the question of whether to build a pipeline to Canada's oil sands.
In other words, folks with skin in the game are leading the innocent among us to conflate "the fortunes of the oil industry with those of the international system," Michael Levi suggests on his blog at the Council on Foreign Relations. Last summer, it suited industry consultants to assert that the sky was falling, while now it is best to give hope for the achievement of a four-decade-old vapidity -- that the U.S. is best off importing no oil. Is it also best for China to import no oil -- is it hostage to Middle East volatility?
Other new conventional wisdoms are being road-tested as well. For instance, for a long time Americans have been led to worry that China is going to eat their lunch when it comes to jobs and economic wealth. Now, a spate of high-profile pieces suggest that Chinese innovation actually is good for the declining West.
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Electric cars -- already on a steep climb because of price and distance anxiety -- will have a greater commercial challenge if consumers fear their car could catch fire. So that the news that a General Motors Volt burst into flames in a testing-center parking lot is going to raise alarm bells. In fact, the incident is not reason for distress-- the vehicle was undergoing crash tests, and as GM points out, any car is subject to fire should a crash be sufficiently severe. The important thing -- and the one that GM will have to figure out -- is that it caught fire three weeks after the latest test crash.
The fire occurred back in May and has come to light only now through press reports, such as this one from Bloomberg. The Volt was parked at a government testing center after undergoing a series of side impacts. Investigators tracked the fire to the lithium-ion battery.
This reminds one of the laptop fires of just a few years ago. At the time, Sony had to work fast and recall millions of batteries and laptops since consumers were unlikely to countenance a fire as they worked, not to mention how, say, airlines would respond if they regarded your laptop as a potential weapon.
GM says that the problem surrounds the crash tests. The federal examiners failed to follow a set of procedures regarding disengagement of the battery after a severe crash, the company says. The federal agency itself reinforced a need for firemen, police and ambulance drivers to understand the specific safety protocol for electric vehicles.
The lithium-ion battery has come a long way, and that the Volt fire did not occur while in use is comforting, but only to a limit. All things being equal, one would not be at ease with the image of one's car bursting into flames while parked in the garage. An ongoing federal investigation will be monitored by the host of carmakers around the world piling in to the electric car race.
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Algae camps: The promise of biofuels entered the global energy narrative several years ago -- yeast was going to revolutionize how we fueled our cars, one inventor told us. No, said another, it would be enzymes. Hmmm ... no, asserted another. Switchgrass would win the day and be delivered to our neighborhood filling stations. Those innocent days seem like a lifetime ago. Nowadays the one biofuel we do have -- corn ethanol -- is stigmatized, and we recognize the monumental challenge of scaling up any non-food, non-fossil fuel liquid to a size comparable with our gasoline-production and -delivery infrastructure. Except that ... one potential biofuel still seems compelling. It is algae. Even some of our most skeptical observers think this disgusting slime could one day make the jump and scale up to a large-volume crude oil. One reason is that in its natural state, it already is up to 50 percent hydrocarbons.
On this subject, we recently caught a fleeting glimpse of some behind-the-scenes tension in the highest-profile algae project in the world. The partners are celebrity scientist Craig Venter and ExxonMobil, the king of Big Oil. The friction in this two-year-old project surrounds how to go about creating algae-based crude oil through the use of genomics. Exxon has pledged to spend $300 million "internally," while rewarding Venter with his own $300 million should he reach certain research "milestones." While the details of those milestones haven't been disclosed, Venter suggested in a public forum a couple of weeks ago that not only have they not been attained, but he doesn't expect them to be under current working conditions. Venter urges wholesale abandonment of the natural algae strains that the partners have been scrutinizing, and a search for a purely synthetic variety -- a turn fully to the genomics that made him famous. In response, Exxon effectively scolded Venter, and said to keep to his knitting.
As we've discussed, that there is a dispute is not surprising -- such is the nature of the scientific process. Equally, that does not mean the quarrel does not merit plumbing.
Go to the Jump for more on the algae row and the rest of the Wrap
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In 1972, Exxon hired a 31-year-old chemist with a raft of fancy university degrees to research anything his heart dreamed up -- except oil. The company was looking to diversify out of petroleum, and M. Stanley Whittingham -- a Stanford post-doctoral fellow with undergraduate and graduate degrees from Oxford University -- was among a slew of top-rate minds hired to figure out how. It wasn't long before Whittingham was wrestling with tantalum disulfide, and emerging with a big breakthrough in battery technology based on lithium. Others including General Motors, Sohio and Argonne National Laboratory were developing lithium-based batteries at the same time, but only Whittingham's invention worked at room temperature. So it was that Exxon -- the most profitable oil company in history -- became the first commercial manufacturer of rechargeable lithium ion batteries. Their appearance seemed to be serendipity. In 1976, Forbes declared that "the electric car's rebirth is as sure as the need to end our dependence on imported oil." As we all now know, that exuberance was dead by the end of the decade. Japan later picked up Exxon's detritus and made lithium-ion batteries a fabulously profitable industry, but for everyone else, they were old news.
Now we are in an age that sounds eerily similar to those days three decades ago. Yet Seth Fletcher reports that this time may be different: Oil prices are higher, and there is more concern about fuel economy, not to mention alarm about global warming -- and 9/11. Plus, batteries are much more advanced -- electric cars have reached commercial critical mass, he writes.
Fletcher, a senior editor at Popular Science magazine, clearly sides with the scientists and engineers who occupy this tightly written book, with 205 pages of text -- he hopes they are right, and that the era of oil winds down. But he does not fall into the technology-writer's trap of becoming gee-whizzy about his subject, which is just the right tone. This is a well-written, smart and -- when Fletcher gets rolling in the last quarter of the book -- rollicking story. In giving us the history, the science, the business and the characters without veering off into irrelevant territory, it is the book that Henry Schlesinger's interesting but ultimately gimmicky The Battery, published last year, was not.